Moody's downgrades 16 Spanish banks

Moody's Investors Service is downgrading the ratings of 16 Spanish banks because of the country's worsening financial picture.

Moody's lowered its rating by one to three notches on the long-term debt and deposit ratings for 16 Spanish banks and one U.K. subsidiary on Thursday.

Moody's said it took the action because the banks face a rising tide of bad loans with Spain's economy in recession, its real estate market a shambles and its unemployment rate stubbornly high. Spain's banking sector is further threatened by its exposure to the Eurozone debt crisis.

The ratings on the banks now range from low-end investment grade to the high-end of junk status. The country's bank ratings are below most Western European banking systems.